Today, President Biden signed an Executive Order (E.O.) to further address the ongoing national emergency declared in E.O. 13959 of November 12, 2020 with respect to the threat posed by the military-industrial complex of the People’s Republic of China (PRC). President Biden also expanded the scope of this national emergency by finding that the use of Chinese surveillance technology outside the PRC, as well as the development or use of Chinese surveillance technology to facilitate repression or serious human rights abuses, constitute unusual and extraordinary threats. This E.O. allows the United States to prohibit – in a targeted and scoped manner – U.S. investments in Chinese companies that undermine the security or democratic values of the United States and our allies.
Specifically, the E.O. the President is signing today will:
Solidify and strengthen a previous E.O to prohibit U.S. investments in the military-industrial complex of the People’s Republic of China: This E.O. will amend E.O. 13959 by creating a sustainable and strengthened framework for imposing prohibitions on investments in Chinese defense and surveillance technology firms. The E.O. prohibits United States persons from engaging in the purchase or sale of any publicly traded securities of any person listed in the Annex to the E.O. or determined by the Secretary of the Treasury, in consultation with the Secretary of State, and, as the Secretary of the Treasury deems appropriate, the Secretary of Defense:
- To operate or have operated in the defense and related materiel sector or the surveillance technology sector of the economy of the PRC; or
- To own or control, or to be owned or controlled by, directly or indirectly, a person who operates or has operated in any sector described above, or a person who is listed in the Annex to this E.O. or who has otherwise been determined to be subject to the prohibitions in this E.O.
Ensure that U.S. investments are not supporting Chinese companies that undermine the security or values of the United States and our allies: This E.O. prevents U.S. investment from supporting the Chinese defense sector, while also expanding the U.S. Government’s ability to address the threat of Chinese surveillance technology firms that contribute — both inside and outside China — to the surveillance of religious or ethnic minorities or otherwise facilitate repression and serious human rights abuses. It signals that the Administration will not hesitate to prevent U.S. capital from flowing into the PRC’s defense and related materiel sector, including companies that support the PRC’s military, intelligence, and other security research and development programs; or into Chinese companies that develop or use Chinese surveillance technology to facilitate repression or serious human rights abuse. Tackling these challenges head-on is consistent with the Biden Administration’s commitment to protecting core U.S. national security interests and democratic values, and the Administration will continue to update the list of PRC entities as appropriate. At the same time, the E.O.’s prohibitions are intentionally targeted and scoped.
The President listed the following 59 entities as subject to the E.O.’s prohibitions. The prohibitions against the entities listed in the Annex to this E.O. shall take effect beginning at 12:01 a.m. eastern daylight time on August 2, 2021. The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) will also list these 59 entities on its new Non-SDN Chinese Military-Industrial Complex Companies List (NS-CMIC List).
Defense and Related Materiel Sector of the Economy of the PRC:
Aero Engine Corporation of China; Aerospace CH UAV Co., Ltd; Aerospace Communications Holdings Group Company Limited; Aerosun Corporation; Anhui Greatwall Military Industry Company Limited; Aviation Industry Corporation of China, Ltd.; AVIC Aviation High-Technology Company Limited; AVIC Heavy Machinery Company Limited; AVIC Jonhon Optronic Technology Co., Ltd.; AVIC Shenyang Aircraft Company Limited; AVIC Xi’An Aircraft Industry Group Company Ltd.; Changsha Jingjia Microelectronics Company Limited; China Academy of Launch Vehicle Technology; China Aerospace Science and Industry Corporation Limited; China Aerospace Science and Technology Corporation; China Aerospace Times Electronics Co., Ltd; China Avionics Systems Company Limited; China Communications Construction Company Limited; China Electronics Technology Group Corporation; China General Nuclear Power Corporation; China Marine Information Electronics Company Limited; China Mobile Communications Group Co., Ltd.; China National Nuclear Corporation; China National Offshore Oil Corporation; China North Industries Group Corporation Limited; China Nuclear Engineering Corporation Limited; China Railway Construction Corporation Limited; China Satellite Communications Co., Ltd.; China Shipbuilding Industry Company Limited; China Shipbuilding Industry Group Power Company Limited; China South Industries Group Corporation; China Spacesat Co., Ltd.; China State Shipbuilding Corporation Limited; China Telecommunications Corporation; China United Network Communications Group Co., Ltd.; Costar Group Co., Ltd.; CSSC Offshore & Marine Engineering (Group) Company Limited; Fujian Torch Electron Technology Co., Ltd.; Guizhou Space Appliance Co., Ltd; Hangzhou Hikvision Digital Technology Co., Ltd.; Huawei Technologies Co., Ltd.; Inner Mongolia First Machinery Group Co., Ltd.; Inspur Group Co., Ltd.; Jiangxi Hongdu Aviation Industry Co., Ltd.; Nanjing Panda Electronics Company Limited; North Navigation Control Technology Co., Ltd.; Panda Electronics Group Co., Ltd.; Semiconductor Manufacturing International Corporation; Shaanxi Zhongtian Rocket Technology Company Limited; and Zhonghang Electronic Measuring Instruments Company Limited.
Surveillance Technology Sector of the Economy of the PRC:
Hangzhou Hikvision Digital Technology Co., Ltd. and Huawei Technologies Co., Ltd.
Own or Control, or Owned or Controlled by, Directly or Indirectly, a Person Who Operates or Has Operated in at Least One of These Two Sectors of the PRC Economy, or a Person Who Is Listed in the Annex to the E.O.:
China Communications Construction Group (Limited); China Electronics Corporation; China Mobile Limited; China Telecom Corporation Limited; China Unicom (Hong Kong) Limited; CNOOC Limited; Huawei Investment & Holding Co., Ltd.; Panda Electronics Group Co., Ltd.; Proven Glory Capital Limited; and Proven Honour Capital Limited.
For information concerning the process for seeking removal from any OFAC list, including the NS-CMIC List, please refer to OFAC’s Frequently Asked Question 897 at https://home.treasury.gov/policy-issues/financial-sanctions/faqs/897. Additional information regarding sanctions programs administered by OFAC can be found at https://home.treasury.gov/policy-issues/financial-sanctions/sanctions-programs-and-country-information.